FARM SHOPS

Farm shops vary from fully staffed buildings selling a full range of fresh, frozen and packaged produce, sometimes with cafés and other amenities attached, to limited opening hours for specific crops or types of produce and 24-hour unstaffed honesty based systems. As such the time commitment and investment required varies significantly.

Farm shops provide a direct relationship with customers, a permanent outlet for produce which requires less packing and transport than some models, and can provide a location to host events.

Market research shows that the most viable farm shops are those offering a sufficient range of produce to make a journey for customers worthwhile, although the need for a wide range of produce is lessened in settings where there’s regular footfall and passing trade.

Unstaffed honesty shop approaches can be useful ways to test the market, and in many cases can grow into significant sales outlets for farms, providing a surprisingly high turnover with very low overheads.

You don’t always need to get planning consent for a farm shop. In some cases permitted development rights allow the conversion of an existing farm building into a farm shop if the shop is less than 500m2, but you will need to look into the planning law in your area.

With most new business ventures a business plan is recommended, but when considering a farm shop, especially when it involves a big investment, a plan is critical. You’ll need to establish that you can draw in enough customers, and the capital and time you invest in the shop will be paid back from profits over time. You’ll need to look into: planning permission; fire-safety; registering as a food retail business; VAT; compliance with Payment Card Industry Data Security Standard; health and safety and food safety requirements; providing parking, including handicapped parking; and access. You may also need to consider: sourcing bought-in produce; waste packaging obligations; and licenses for processing and handling food.

On the plus side, you may be able to secure a grant towards capital costs of setting up the shop and/or to pay for business planning (see LWA’s Guide to Grants and Fundraising). It’s strongly advised to take advantage of free business planning support if this is available, as a strong business plan is invaluable. It’s also critical to ensure you or a person in your team has a head for figures; by staying on top of your profit and loss and cash-flow, you will ensure the long-term viability of a farm shop, and in turn your farm business.

This guide can’t cover all the aspects that would need to be considered when planning a farm shop business. Unicorn Grocery Cooperative has prepared a free guide to setting up a grocery shop which includes the cost of shop fitting, guidance on pricing, IT, presenting fruit and vegetables, health and safety, permits and licenses and much more: www.unicorn-grocery.co.uk/grow-a-grocery.php.

Advantages

 * There are no deliveries, customers come to you.
 * You can sell the produce you specialise in, and buy in other produce.
 * You get the retail price for your produce.
 * If it’s just a stall with an honesty box, it requires little of your time to staff.
 * You can add other business and ranges of produce to your farm based on a known footfall.
 * Ability to upsell and cross-sell by offering a wide range of produce.

Disadvantages

 * Farm shops, other than those operating with honesty boxes, require regular staffing.
 * Shops require maintenance and have high overheads.
 * Can be expensive to set up.
 * Administration can be complex.
 * Potential for waste, as harvesting for unknown demand, and maintaining the feeling of abundant produce.